Milan

German contractions up pressure on Spanish, Italian bonds

Spread surpasses 500 in Spain

German contractions up pressure on Spanish, Italian bonds

(ANSA) - Milan, August 23 - Bad economic data from Germany put renewed pressure on Spanish and Italian bonds Thursday in midday trading. The spread between 10-year Spanish bonds and the German benchmark bund, an indicator of investor confidence in Spain's ability to weather the euro crisis, was at 501 points, surpassing the psychologically important 500-point threshold, with a yield of 6.39%. The equivalent spread between Italian and German bonds was 433, up from 420, with a growing yield of 5.72%. Investor confidence was soured by data Thursday that showed Germany's small and medium businesses suffered an unexpected contraction in August, down to 48.3 points from 50.3 on the Markit index. The country also registered its seventh-consecutive private-sector contraction, prompting investors to fear that the mighty German economy is being pulled into the eurozone crisis.

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